T cell tolerance is critical for the prevention of autoimmune disease, graft versus host disease and for transplantation survival. There is a growing appreciation for the role of costimulatory molecules, which provide the 'second signal' in the classic two-signal model of T cell activation, play in maintaining T cell tolerance, that is striking the balance between generating productive immune responses and preventing pathogenic responses to self-tissues. Cytotoxic T lymphocyte antigen-4 (CTLA-4) is a member of the CD28 costimulation family that is a critical regulator of T cell activation and effector functions. CTLA-4 functions to counteract activating signals and inhibit or attenuate T cell activation and responses. In this proposal we hypothesize that CTLA-4 can function using a heretofore unidentified and novel mechanisms to regulate T cell tolerance. In the first specific aim we propose to test the hypothesis that there are alternate methods of CTLA-4 endocytosis. Further we propose that these alternative methods are critical since they will provide an unidentified mechanism of CTLA-4 function via intracellular signaling occurring spatially distinct from the TCR signalosome. We will test these predictions by series of approaches using dominant negative mutants and RNAi knock-down of key proteins in candidate intracellular trafficking pathways. In Specific Aim 2 we propose that CTLA-4 is released from activated T cells via vesicles and that membrane bound CTLA-4 can be acquired in trans. Further we propose that this source of CTLA-4 can function passively by competing for ligand or, more interestingly, can be taken up by the 'acceptor' T cells and actively inhibit T cell stimulation. We will test these predictions for both membrane bound isoforms of CTLA-4 (full-length and ligand-independent CTLA-4). The insights gained from the proposed studies will elucidate a novel mechanistic basis for CTLA-4-mediated regulation of T cell responsiveness, T cell tolerance and loss of tolerance. Understanding these processes is critical for designing novel therapeutic approaches to treat autoimmune disease and allergic diseases and in transplantation. To date there has been limited advancement on the ability to increase CTLA-4 function. The proposed model of CTLA-4 function would provide a novel means to increase CTLA-4-mediated inhibition in vivo.